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HomeMy WebLinkAboutCOM 0624.005 2002-2004 (~1 ~ y / ( April 16, 2004 L'~U~~ Ilf~i~ ~rl I~k~ ~I rC)i-r`` i ' P.O. Box 827 Pepeekeo, HI 96783 Councilman Fred Holschuh, M.D. Hawaii County Council 25 Aupuni St. Hilo, HI 96720 Dear Councilman Holschuh: I'm writing this as a follow-up to our recent meeting with Ms. Marilyn Vincent of the Real Property Tax Office. My hope is that you will take the initiative to propose lowering the real property tax rate for owner-occupied residential and bonafide farm properties. Longer term desired outcomes aze that you will, similazly, address systemic problems in land use that are placing island residents at risk ofno longer being able to afford their own homes or land. The land speculation occurring in Hamakua, and the frenzy of real estate acquisitions everywhere on island (mainly at the hands of OFF island buyers), are causing values here and everywhere on island to rise dramatically. This, together with a new method for calculating the value of the home site portion of farms and ranches, is a concern forme and other farmers and ranchers as the article by Virginia Smith (enclosed) notes. My own land value here in Pepeekeo where I live and farm nearly tripled over the past yeaz despite the fact that I have simply continued to farm it without making any improvements or decreasing the farm acreage. For me personally that will result in an increase of $621.00 in property tax if the county council does not change the tax rates, azid it would mean that my property taxes will have doubled since 2002. The root cause of this has been the speculation in agricultural land that has occurred in our Hamakua district over the past two yeazs. I do want to note chat my modest farm income (estimate $15,000.00 in 2003, 90% of which was recycled into our local economy for wages, services, supplies and equipment) is not my sole source of income so I am one of the fortunate ones who will be able to absorb this added tax if it does occur. However, I am concerned at what impact this wilt have on many of my neighbors and many other island residents who aze futly dependent upon farm income and or modest pensions to survive. Even for me the likelihood of my property taxes doubling in two yeazs' time is troubling as I turn 65 this summer and face the prospects of also living on fixed pensions and declining farm revenues. Will farming be a viable option for me five yeazs from now at this rate? I suggest several courses of action to address this situation. First, commensurate with your 2004-2005 budget review of county revenues (greatly aided by this windfall in Comm. No._, ~ Z~' Ref. To: etNrar~ ~ Ref. Uate~-- property taxes, I would think) and proposed expenditures {always increasing but more so now to keep up with the added growth in population, vehicles, opala, etc.), recommend you consider lowering the property tax rates as I suggested above. Second, I urge you to consider imposing a steep conveyance tax on land speculators who are simply trading in island property as a commodity ("flipping properties" as it's known in their trade) for their own personal gain. These speculators (most ofwhom aze not full time island residents or local people) are getting wealthy at our wllective expense via the accelerating property values they cause in addition to the waste, congestion, quality of life issues, etc. that they often contribute to disproportionately. In short, local residents are left "holding the bag" as these "carpet baggers" move on to do their next deal! They don't even pay excise taxes (as I do) on their earnings from their land. A county property conveyance tax is an idea whose time has come. The revenues from this tax should be eazmazked for county infrastructural improvements (thereby avoiding raising fuel and property taxes), for improved public transportation, for enforcement of environmental and land use laws (that does not presently occur), or other designated uses. Such a tax would also put a damper on land speculation as residents of other "endangered island communities" in the Pacific Northwest and New England states have long since learned and have resorted to as a successful strategy for managing growth. We will likely need to work with the state to achieve this taxing mechanism but it will be well worth the effort. Finally, we need to modify or close altogether a major loophole in our zoning code that deals with parcels or "lots of record" that existed prior to the implementation of a zoning code here in the early 1960's. The existing law allows owners of such lots to build, develop, buy or sell, or consolidate and re-subdivide them without regard to the zoning, without infrastructural improvements, and without any mitigation for the negative impacts they cause on roads, schools, drainage, etc.. For example, if the owner of a 10 acre former cane field that evolved from pervious lots of record (i.e., homesteads grants, Kuleana pieces, etc.) can make his case with the county that their land is comprised of twenty discrete lots of record that existed prior to zoning, they have the right under current law to consolidate and re-subdivide (PCRS) this one existing pazcel into twenty sepazate %z acre pazcels shazing a common red cinder "access road", notwithstanding the fact that they may be located on the rim of a cliff in AG land that has been zoned AG20 or AG 40. Indeed this is exactly what land speculators have done in recent years despite the fact that they were not the original owners that the loophole was designed to protect. These "lots of record" pazcels are what the "smart shoppers" are buying in large tracts and sub-dividing along PCRS guidelines selling the resulting farm lots at "market prices" (that no locals can afford!) with virtually no development costs involved and little benefit to anyone beyond themselves, their attorneys, some reahors, the escrow companies, and a few surveyors. Little wonder that land speculators are descending upon the Big Island from neaz and faz to capitalize on this raze opportunity to get rich overnight. All it takes to succeed is a money hui and a couple of willing attorneys specializing in reseazching titles. For an example of these PCRS sub-divisions (which aze reminiscent of the infamous Puna sub-divisions of the 1960's) you need only drive up the Belt Highway past Pepeekeo to observe the plethora of new "gated communities" and Yz million dollar homes taking shape along the Hamakua cliffs (eroding the edges and causing landslides onto the highway below which the county then dutifully cleans up at no cost to the offending property owner). We know how local residents view these projects as they are systematically shut out of traditional mauka-makai access routes by the gates and fences that have changed the landscape overnight. We can only wonder how towists view this scene after they've traveled thousands of miles to view "the unspoiled Hamakua Coast". Is this existing PCRS loophole good for the county in terms of costs vs. benefits? Is it good for agricultwe? Good for towism? Good for the environment and the economy? Good for local people?! Think we should tighten it up now or wait until another 10-I S PCRS subdivisions have been approved? Clearly, I recommend the former. Mahalo for yow patience in reading this long, tedious letter. I couldn't distill it into a page or two without diluting the content although the ~ncloswe attached (letter from Claudia Woodwazd-Rice) comes close to doing just that. Please share this with your Colleagues on the council and with their aides and auditors as well because this is not just about my own rising taxes, it's about a bigger problem that affects all of us. My hope is that you will quickly move on the tax rate and perhaps the conveyance tax proposal as well. The mayor is right. We do need to fix our roadways without further procrastination and that requires additional funding. A conveyance tax could provide tax funding without penalizing everybody as increased fuel taxes would do. Time is not on ow side. We need only turn back the clock a year or two to observe "the bargain pieces" in real estate (or property taxes!) of 2002. We can also look up the island chain for the insights we need as to where we're quickly headed if we allow ow current policies to remain unchecked. Ow futwe is on the line today. We need to act wisely, we need to act boldly, and we need to act NOW. Kokua! Ua mau ke ea o ka aina i ka pono. ~ Bob~Williams Two enclosures CI: Mayor Harry Kim Ms. Marilyn V incent " ~ f >L'~J ~ ~i IG(.irZS tuesday GNINOS f ?WWn~sday HOMELIFE ~ ~~'""-n`~ a~wd ahu Icad to fanner, ~uo~lividutc ihev hst-m sand Thursday BUSINESS i and ,chin! ~ of puttums of it m order Friday ARTS&ENTEflTAINMENT I [o pav she !axes on the pan [hey are keepm_~. Obviously this does not sup- ' ' - ` ' ~ ~ ~ ~ ~ port. conserve ur protect acriculture. .a~nculture a an imponant part of ourecunumy and lifestyle. The 1997 Tropical gardening United States Department of Agricul- ttue 1 USDA) Census reported that there were 3.319 fauns on the island; 2,062 of which were between one and nine acres in ,ice. Virginia The 1997 Ag Census also reported Easton a market value of agriculturl prod- - acts sold of almost 5170 million for Smith Hawaii County. This is almost 35 per- crnt of the $500 million value for the state. Of course this dcesn'[ include Isle farmers worry tl,e value of things like processing macadamia nuts from in-husk to in- about higher taxes shell to the roasted nu[ or of products such us chocolate covered mac nuts. he recumng question ['ve Therefore, it is estimated that the Tbeen hearing the last couple market value ,hould be multiplied by weeks is "So. did you ~•et at least two, and perhaps three, times your tax .usessment°" It is to give a more accurate value. usually followed wnh 'Bv haw manv The USDA conducts this huge times did your taxis eo up'" nationwide agriculture census every The "new method for calculating Eve yeah I the _002 census data will the value of the homesite portion" of be analyzed and uvatlable in June. For farms and ranches is a growing con- more statistics tin agriculture see cam in the agricultural community. http~/www.nass.usda.gov/census/, or The topic was discussed at recent call the National Agriculttual Sta[is- meetings of the Kona Farm Bureau tics Hotline at 1-800-727-9510. and the Kona Farmers Alliance, as What can you do about the real well as at the farm supplies stores, property taxes? First look carefully at and across the back fence (and the e- your 2004 Real Property Assessment mails have been flying') Naace and be sure you tmderstand According to a letter sent by the what it means for your situation. Hawaii County Real Property Tax Next, get involved with [he commodi- Office to about 5.000 owners and ry or farm organization of your lessees of property zoned agriculture, choice. If you disagree with the way "the principal change involves valu- the tax is being calculated. voice your ing the non-farmed or homesite area opinion with a phone call or letter to atone that is representative of the your' elected of5cials, and to the Rea! market value of a comparable home- P[opeRy Tax office. site." This is resulting in enormous You can also file an appeal of your increases in taxable values and result- assessment, there are four possible ~ ing huge increases in taxes for most gtomds for appeal-see which one or growers and may be the straw that ones apply to you. The appeal must breaks the camel's back for many be postmarked by April l2 (the usual small fanners. appeal date is Apri19 butt this year it Even thou:h a farm dwelling is an is the 12th), and accompanied by a allowed use on land zoned agricul- 5l5 deposit. Go to www.hawaiiprop- ture, it is bein_ valued at the market ertytax.com (then Fortes and Insttuc- value tix a residential lot of that ,ize [ions, then Appeals) for more infor- as ~f rt were a ,eparate parcel It is matron and forms. sug~e,ted m the letter that the home- ~~L / uwne(; clasuhcanun [ax rate I which is a little aver half that of the agricul- u~tR ~-e~ rtau~gr. [oral rates might he more favorable ~QYE~S$O[ISOrOO with thiti new ;vtitem. -.w.w,u~.r ci:.wh Bcr~~re ahunsm~. he ,are ~ ou tic Editor David Bock aware ~,f ht~~e phi>,ould .tttect your 335-0""622, ext. 244 [axas ~~n she ,`umre .me. market ~:alue, Assoc~~ate sditor Richard Palmer arc .ur, 'r~ ~~.c a ~ne. ~•m,e'n he 935-a622, ext. 245 ~ ?97![I'. ~ JU': ire 't~ n~`. .:'R'n' Save Hawaii Island's farm lands Hawaii Countv is an island, and much of the flelt_~ighway is limited to two lanes by multiple badges. Basic infrastructure here is often poor, many households have no public water supply and public safety services are more than 30 min- utes away. ~Vhy then does the County of Hawaii continue to. approve development that burdens communi- ties with increased traffic, toss of prime agricul- tural land, and new residents the current infra- structure cannot support'? Are we doomed [o go the way of Maui with local residents priced out of the community'? Why aren't our planning and zoning laws updat- ed to protect us from the gridlock, flood and sprawl which resuh, from poor planning'? County residents are skilled in a~>riculture but land is continually being hroken up into smaller and smaller parcels at inflated prices. This stress- es the ability oFdivecsitied agriculture to com- pete with speculators who would sell parcels for gated communities and "up-scale" developments that destabilize rural areas. The costs of infra- structure often are no[ paid by the developers, and will ultimately be borne by local taxpayers. When we consider the capacities of our roads, schools, public utilities and public safety ser- vices it is obvious that allowing speculators to control planning is a recipe for disaster. In rural South Hilo, sated communities will soon add their trafFc to the current congestion. New driveways can be seen all along the high- way north of Hilo where prime agricultural lands will disappear under residential sprawl. County council members have heard loudly 'from Kona residents complaining about gridlock and over-development. A mauka parcel in Hilo is .slated for dense development in spite of the flood dangers it would create. This is an election year. [t is time for the coun- ty to face its infrastructure limitations, preserve our agricultural resources, and control growth to manageable proportions. Claudia Woodward-Rice Honomu jl~~lC 2Li~~ rC_ 7